Ask Matt: Invest in which? McDonald's or Burger King?

A: Investors are remembering the cold war with Russia. But investors are also wondering if the old burger wars of the 1980s are making a comeback, too.

Burger King is assaulting McDonald’s both with new products and pricing. Burger King’s Big King is a three-bun attack on McDonald’s Big Mac, not to mention aggressive discounting. Meanwhile, both McDonald’s and Burger King are facing pressure from fast-casual concepts, like Chipotle Mexican Grill not to mention Yum Brands.

Some analysts have turned pretty guarded on McDonald’s due to the competitive threats, including from Burger King. Jim Yin of S&P Capital IQ rates McDonald’s stock a hold despite the fact that he sees earnings per share rising 6% in 2014. Must of the growth in earnings per share is being driven by the company’s stock buyback program, not real growth, Yin says. The average Wall Street analyst rates the stock a 2.4 out of five, making it an “outperform,” but barely.

But despite Burger King’s aggression, analysts aren’t bullish there, either. Burger King has an average rating of 2.55, which is a hold. The fact is, both companies are in a similar situation. And the stocks aren’t cheap or pricey, says New Constructs based on a discounted cash flow. Investors who want into fast-food could pick or choose, but investors might find better options in other industries.

USA TODAY markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or @mattkrantz on Twitter.